In a challenging tariffs environment, Lunenburg, N.S.-based frozen seafood company High Liner Foods (HLF-T) was able to increase its earnings and sales volume in the second quarter.

The firm’s adjusted EBITDA rose by $5.1 million (all figures US), or 20.3 per cent, to $30.2 million in the most recent quarter, compared to $25.1 million in the same period last year. 

“We achieve these results despite continued pressure on gross profit from inflation, higher raw material costs and continued tariffs, providing early evidence that our actions across pricing, promotions and supply chain are gaining traction,” Paul Jewer, president and chief executive officer of High Liner Foods said during an earnings call.

Overall sales numbers also came in strong: sales volume was up by 2.2 million pounds, or four per cent, reaching 57 million pounds compared to 54.8 million pounds in the same quarter last year. Sales increased by $29.7 million, or 12.4 per cent, to $269.3 million compared to $239.6 million for 2025.

New products, business drive stronger sales

These results were achieved by a number of factors, according to Kimberly Stephens, chief financial officer, who was also at the earnings presentation.

Its strong numbers in sales were mainly “due to the sustained demand for High Liner’s diversified product portfolio, the successful launch of the new product innovation, additional contract manufacturing business, and the volumes associated with the United States Department of Agriculture (USDA) contract,” she said.

The company has introduced 24 new items so far in 2026, to its frozen product lineup, according to Anthony Rasetta, chief commercial officer, who was also on the call.

“While inflation and price sensitivity continue to shape the category, consumers are being deliberate about where they direct their spending . . . Against this backdrop, the breadth of our portfolio across species, formats, and price points served us well, with growth across both premium and value offerings,” Rasetta said.

Higher costs passed on to consumers

With higher operating costs becoming a factor, the company was able to increase its pricing to help offset those challenges.

“These actions are an important step towards strengthening margins, although external conditions continue to evolve as new tariffs are implemented and raw material and fuel costs continue to rise,” Jewer said.

The company received good news on Friday regarding tariffs as International Emergency Economic Powers Act (IEEPA) tariff refunds kicked in. The organization has refunded more than $100 billion after a U.S. court ruled that certain tariffs were illegal.

“The IEEPA tariff recoveries announced today help explain the margin pressure the business experienced during 2025 and the beginning of 2026,” Jewer said.

It received $7.9 million in tariff relief, which offset the $5.7 million in incurred cost of sales during the quarter.

“While the recoveries will be recognized in our second and third quarter results, they relate to costs incurred during those earlier periods, and we were not able to immediately or fully price for the tariffs.”

However, there was further good news on this front, that will be reflected later on, Stephens said.

“The company received further tariff recovery of $27.9 million of the total $41.3 million applied for subsequent to quarter end, this amount will be recognized in the company’s third quarter of 2026 financial results.”

“We are still in the process of analyzing the full tariff impact, including the extent to which those costs may have been partially offset by pricing actions,” she said.

‘Under-consumed’ product mix

High Liner is also well positioned to benefit from the increased focus consumers are paying to high-protein diets, according to Jewer.

“Seafood remains under-consumed, and demand for healthy, affordable, and convenient protein solutions remains as relevant as ever.”

Partially offsetting the positive news was the fact that distribution expenses were higher in the second quarter: rising by $2.8 million to $14.2 million compared to $11.4 million in the same period in the prior year.

“The increase in distribution expense was mainly due to the increase of sales volume, as well as increased freight costs incurred on the sales associated with the newly acquired brands from ConAgra Brands and the incremental distribution costs from increased fuel costs and freight rates,” Stephens said.

High Liner purchased Mrs. Paul’s and Van de Kamp’s frozen breaded and battered seafood brands from Conagra Brands on June 30, 2025.

Its long-term debt picture was a little bit more challenging in the quarter, Stephens said.

“Net debt at the end of the second quarter of 2026 increased by $13.4 million to $335.8 million compared to $322.4 million in the end of fiscal 2025, reflecting higher bank loans and lease liabilities, partially offset with the lower long-term debt and higher cash balances.”